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Legally Speaking

Decriminalising defamation in India

Sushil Kumar Jain



Understanding defamation

Before starting with the topic “Decriminalizing Defamation in India” it is imperative to understand the meaning and concept of “defamation”.

The word “defame” means “to harm the reputation of”. Defamation of a person is an offence punishable u/s 499-500 of the Indian Penal Code. The offence can be traced to violation of “right to reputation” which is a genus of the “right to life and liberty” protected under Article 21 of the Constitution of India. If a person’s reputation is harmed, his rights under Article 21 of the Constitution of India are infringed for which he has remedy of torts under civil law and remedy u/s 499-500 of the IPC under the criminal law. The said section provides that any words, signs or representations which harm or intend to harm the reputation of a person would constitute the offence of defamation. There are nine exceptions provided to the said definition and an act or publication is not defamation if it falls under any of these nine exceptions.

 A delicate balance

Undoubtedly on one hand, an individual’s right of reputation is protected under Article 21 and at the same time freedom of speech and expression is recognized and protected under Article 19(1)(a) of the Constitution. Since both the rights are protected, one right cannot be given preference over the other and therefore the state whose actions are subject to Article 13 cannot, by way of legislation, indicate a preference on one right over the other. Both the rights have to be harmoniously construed. (Chintaman Rao v. State of M.P., AIR 1951 SC 118).

Creation of criminal remedy creates an imbalance as it has a chilling effect on the exercise of a right of speech. The mere threat of criminal prosecution and the possibility of a prison sentence and fine is intended and directed towards discouraging people from speaking out.

Why decriminalising

Defamation was sought to be decriminalized on the ground that the colonial law has become antithetical to free speech and is being used for stifling voices. Defamation of an individual by another individual is a civil wrong or tort, it can be remedied by an action for damages. The enabling power in Article 19(2) to impose reasonable restrictions is intended to safeguard the interests of the State and the general public and not of any individual. Criminalizing defamation has the effect of virtually negating the freedom of speech and expression. The law of defamation is unreasonable and vague in as much as even truth is not a complete defence as per the provision. It is only a defence if the matter is concerned with public good which itself is an extremely vague concept and hence is prone to misuse

The rampant misuse of the provisions

There have been numerous instances where the law of defamation has been extensively misused by influential litigants to browbeat or arm twist their opponents.

A large number of civil cases are filed alleging forged wills or civil disputes based on forgery, fabrication and misrepresentations. Section 499 would enable the defendant to take recourse to defamation proceedings against the plaintiff to arm twist the party so that he may not pursue his civil case. In terms of the press, criminal defamation has a chilling effect which leads to suppress a permissible campaign. The threat of prosecution alone is enough to suppress the truth being published.

The procedural safeguards can only stand the test of reasonableness if the Exceptions to Section 499 IPC are taken into consideration at the time of summoning of the accused and burden is placed on the complainant to prove that the case is not covered by any exception listed in section 499.

The Role of Press

The Supreme Court in the case of Ramesh v. State of Madhya Pradesh AIR 1950 SC 124 included freedom of press as a fundamental right under article 19(1)(a) of the Constitution of India. The result was that the press could not be subjected to any restriction by making a law unless that law itself was constitutionally valid and was consistent with clause 2 of Article 19. The freedom of press is well recognized in the case of Indian Express Newspaper vs. Union of India in 1985(1)SCC 641

While considering freedom of speech and expression the function of press and media is exposing abuses of power and corruption of public officials and in keeping them responsible to the people, who they are expected to serve. Philosophically, the ultimate good in free society can be reached only by discovery of truth. The concept of freedom of press originated in England. Prosecution for the expression of opinion in matters relating to science or philosophy were resorted to by the Church and the State; to suppress alleged hearsay, sedition and the corruption of the youth.

In today free world freedom of press is the heart of social and political intercourse. Since freedom of expression includes the freedom to propagate one’s own views as well as of others and to communicate them to others, it follows that the freedom of the Press includes the right to give opinions (subject only to such restrictions, imposed by the State, as are constitutionally permissible). Such views or opinions may be those of the editor or author but also those of other people, printed under his direction.

Supreme Court on decriminalising defamation

The constitutional validity of section 499-500 IPC was challenged before the Supreme Court recently in Subramayam Swamy vs Union of India. The Court has upheld the constitutionality of the said provisions and refused to decriminalise the same. The Court observed that the freedom of speech and expression does not confer an absolute right to speak or publish whatever one chooses and it is not an unrestricted or unbridled licence that may give immunity and prevent punishment for abuse of the freedom. Protection of reputation is a fundamental right. It is also a human right. Cumulatively it serves the social interest. The Supreme Court has opined that the reputation of one cannot be allowed to be crucified at the altar of the other’s right of free speech.

The loose ends

In the case of Subramanian Swamy, the Court has not take into consideration:

The effect of criminal defamation as being an indirect censorship on the press.

 The said provision has a chilling effect on the freedom of the press and will negatively impact the investigative journalism which is the need of the hour.

The media houses will have to prove the truth of their allegations which process is extremely long and cumbersome and till that time, the editor, journalist and other persons would be treated as an accused and will have to face a lengthy trial.

Criminal cases consist of an onerous procedure for trial i.e. requirement of bail, attendance on every day of hearing, standing in the accused stand several times. Moreover, as per the latest figures there is a pendency of a staggering 3 crore cases in different courts out of which almost 2 crore cases are criminal cases.

There have been gross abuse of such provisions as is evident from the misuse of 498A IPC. The Court has to be alive to the ground realities. Given the case arrears and the slow pace of trials there have been few convictions for criminal defamation. It stifles legitimate speech itself.

 The Court has spoken at length about the importance of the reputation of an individual which is a part of Article 21 and has held it to be a justification for the criminalization of the offence of defamation. But the Court fails to consider the loss in reputation and the consequent violation of Article 21 of the person who has been falsely accused in a case of defamation. Under the circumstance, on the one hand even if the right of reputation of complainant is affected, there is competing right of the accused in defamation case, who, after facing a protracted trial has been acquitted. The provision of sections 499-500 are also required to be considered from this aspect.

Two kinds of defamation actions have emerged. First, political interests have adopted defamation law to settle scores and second, powerful entities such as large corporations have exploited weaknesses in defamation law to threaten, harass, and intimidate journalists and critics. In a prosecution for defamation under Section 499 IPC, fair comment would not be protected.


This is the right time the Parliament should act in the matter in public interest. The legislature needs to step in and remove this colonial provision. With criminal defamation laws, critics become criminals and those who wish to participate in the public debate of ideas that characterise democracy face a heightened risk.

Sr. Adv. Sushil Kumar Jain is Senior Advocate, Supreme Court.

Legally Speaking

A prudent approach to ed-tech: Regulatory prism for the sector



“Invention, it must be humbly admitted, does not consist in creating out of void, but out of chaos” — Mary Shelley (in ‘Frankenstein’)

A Brief Introduction 

Technology is the greatest disruptive phenomenon that has occurred to mankind. The internet which started for sovereign purposes in the 1960’s has reached our bedrooms today. The advanced technology like Artificial Intelligence (AI), deep learning, Internet of Things (IoT), cloud computing and big data are the propellant of change in the whole dynamics of societal and organisational conduct. To bring in the context here, ‘Education Technology’ (“EdTech”) is one of the by-products of such technological advancement which has disrupted the way of imparting knowledge and the method of teaching and learning by transcending all geographical limitations, and has gained more relevance in time of this unhappening pandemic. 

Ed-Tech and its Application: Insights 

‘Education Technology’ or ‘Instructional Technology’ can be understood as a mutation of technology and conventional education system to transform the whole learning and teaching experience. What was limited to the four walls of a classroom has flipped to an e-learning mode. Now learning and imparting knowledge is not confined to a physical location, rather the mode of accessibility has gone global. You can access your learning modules on your digital devices anytime and anywhere. A course offered by a university in USA can be accessed by a person at any location in India, such is the impact and transition. If you are an entrepreneur and want to work in the education sector, you need not necessarily establish an educational institution backed by huge capital, technology can be the aid for you. This mix of internet and education has also been addressed by Kerala High Court, holding right to internet access as part of right to education under Article 21 of the Constitution of India. 

EdTech is an ecosystem where technology is used to enhance the academic experience, method of teaching and learning, increased accessibility of resources. The technology deployed is not only a hardware or a software, but most often as the future will be, an AI Teacher, an online library on cloud servers, a synced collaborative learning process through the mechanism of IoT, advanced predictive assessment and guidance process through big data analytics and the development will be manifold. The whole conception of education might change. 

The present example, in the time of corona crisis, the educational institutions have adopted technology to provide e-learning facility. The different models of EdTech have been plied, like the flipped classroom, synchronous and asynchronous mode of teaching, online tutorials, computer-based training or linear learning, collaborative learning, students enrolling for online certificate courses, the credit transfer courses from foreign universities, gamification of education, dish tv operators like Tata Sky collaborating to provide classroom teaching on your television, web based knowledge sharing platforms and mediums like Unacademy, Byjus, ebooks, online library etc.

 Questions to ponder But few realistic and ethical questions might also occur. Whether AI will replace human teachers completely? What about the machine bias and how to get rid of it? Whether classrooms will go flipped, completely? Whether e-learning will suffice the human touch of physical interface? How to address the concern of digital accessibility of financially weaker class, if EdTech is the future? Whether the future beholds a blended learning of pen and paper complimented with technology or will it act in isolation? Whether we have to do away with physical space of learning? Whether the change will be for good or will it deteriorate the education system? What about false profiling of teachers, online defamation and child privacy violations? Whether the Internet Service Providers (ISPs) will have to face any intermediary liability for an independent EdTech entrepreneur’s mischief over internet?

 Regulatory Laws: Opportunities and challenges 

a) Education Policy and UGC regulation With a lot many questions, debates, speculations and curiosity, the sector has gained a lot of traction and hence is being brought into the regulatory arena. In India, the New Education Policy, 2020 (“NEP Policy/ Policy”) has brought in sweeping changes in school and higher education. The Policy has revised the curriculum structure with focus on more practical learning and skill training. The higher education has been opened to foreign universities, selective course reading has been introduced, colleges and universities will be multidisciplinary, changing the whole thrust of education system. The EdTech will play a major role here for achieving the visionary Policy goals. However, they will have to operate as per applicable University Grants Commission (UGC) rules. The UGC introduced the University Grants Commission (Online Courses or Programmes) Regulations, 2018 regulating the online courses offered by University in India. But the NEP Policy, has proposed to dismantle the UGC, so it has to be seen in the long run how the regulatory construct will be.

 b) E-commerce rules and Foreign Direct Investment On the economic front, EdTech companies have seen exponential buyouts for this year. Byju’s, Vedantu and Unacademy, the Indian EdTech companies have been diversifying uniformly and their valuations have grown significantly. EdTech has become a medium of exchange of services and products and has attracted electronic transactions, thereby inviting ECommerce regulations. The new Consumer Protection (E-Commerce) Rules, 2020 will have a significant role to play here. The scope and applicability of this rule is wide enough to cover all goods and services bought or sold over digital or electronic network including digital products and all models of e-commerce, including marketplace and inventory models of ecommerce. The definition of an ‘e-commerce entity’ includes any person who owns, operates or manages digital or electronic facility or platform for electronic commerce.

 An EdTech is most likely to fall within the domain of this definition, as it is being offered in consideration of some fee, and hence the regulatory obligations and liabilities will apply directly. However, free services by platforms will fall outside this regulatory ambit. At the same time, it will be critical to analyse whether the EdTech model is falling under ‘marketplace e-commerce entity’ or ‘inventory e-commerce entity’ under the E-Commerce Rules to determine the subsequent foreign direct investment (FDI) norms, as applicable. As the FDI Policy of India stands, in ecommerce although 100% FDI is allowed, but it varies depending upon the business model. While for a B2B (Business to Business) model, 100% FDI is allowed, the Government of India has been reluctant to allow the same for a B2C (Business to Consumer) model. This would impact the EdTech sector bifurcation based on ‘marketplace e-commerce entity’ (alike B2B model) or ‘inventory e-commerce entity’ (alike B2C model).

 It is also to be given a thought, reconciling the past apparent conflicting views of courts and tribunals, whether education is a ‘service’ and students are ‘consumer’ under the Consumer Protection Act, 1986. Recently the National Consumer Disputes Redressal Commission in a reference answered that educational institutions don’t fall within the ambit of Consumer Protection Act; however, coaching institutions are rendering ‘service’ and needs to be distinguished. So, it needs to be finally settled by the authorities how the construct of law has to be in this regard, to give more clarity.

 d) The IP rights, AI ecosystem and Data Sanctity The challenge for an EdTech company is also to protect its intellectual property rights. The contents that are generated, the algorithms being used, software, brand name, domain name, know-how, protection of these is a robust task. Simultaneously, the seamless interaction of persons through technological interface is observing huge flow of data, contents and has invited privacy concerns. Since the whole EdTech architecture is backed by AI, the recent draft framework of the Indian Artificial Intelligence Stack will have a pivotal role to play. The questions of AI bias and its training, the emerging privacy concerns and sanctity of data principles can be addressed in a more comprehensive manner, when it comes to EdTech. The Information Technology Act, 2000 (IT Act) and compliance of Section 43A, 72, 72A along with the Information Technology (Reasonable security practices and procedures and sensitive personal data or information) Rules, 2011 is a key aspect for addressing privacy and security concerns. The intermediary regulations under section 79A of the IT Act along with intermediary guidelines will also come into motion.

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Legally Speaking

Independence of Independent Director



The genesis of the institution of Independent Director should be viewed from the ownership of the company vis-àvis management. Board of Directors is an integral part of the company. In layman’s language, they are a group of people who are appointed by owners of the company to look after the interests of the stakeholders which comprises of different people like employees, investors, government, society etc. BOD is credited with the work of looking after the day to day management of the company. It is assumed and expected that the BOD will carry the same functions with transparency and accountability and carry out the affairs in interests of the common good. This is exactly the triggering point for the so called independent behavior of the board. The idea of independence has been a shabby concept and what has been generally seen is that the board often works prejudicial to the interests of the stakeholders motivated by material benefits of few members. This called for the need of an institution which would be really independent and would carry out their functions with absolute accountability. 

The Indianized conception of Independent Director has been transplanted from the Anglo-Saxon jurisprudence. The independent director can be regarded as that member of the board who has disseminated himself from the internal affairs of the management of the company. He is expected to monitor the board with a sense of segregation. The Companies Act of 2013 traces the concept of independent director under Sec. 149. It has been a wide advocated concept that the institution of independent director has been major tool of corporate governance.

 The article seeks to answers one of the most burning questions of the corporate world i.e. are independent directors really independent? It has been advocated by the concerned article that the institution of independent director has been a sham in India. The concept has been well adopted in theory but lacks practicality. Three prongs have been attacked i.e. nomination, removal and a remuneration which creates hurdle in independency of independent director.

 The Definitional Issue of ‘Independence’ 

There has always an ambiguity worldwide as to what constitutes “independence” of independent director. Policymakers of India have tried continuously setting out different meanings attached to the term “independence”. This dates back to the CII Report which although recognized the importance of the institution of independent director, but abstained from defining the term. The first legit attempt to define the term was made by the Kumar Mangalam Birla Committee report. The committee defined independent directors as “directors who apart from receiving directors’ remuneration do not have any other material pecuniary relationship or transactions with the company, its promoters, its management or its subsidiaries which in the judgement of the board may affect their independence of judgment”. The definition ought to be a narrow approach to determine the independence of independent director. Sole reason for the definition being treated as a narrow test was its pecuniary considerations. These recommendations soon led to a regulatory framework i.e. clause 49 of the Listing Agreement. The concerned clause listed out exclusions to the institution of independent director like individuals who were related to promoter and members of senior management by familial ties. There were some other exclusions as well. However, the provision did not capture certain social relations that would affect director’s independence. These loopholes were done away with Sec. 149 of the Companies Act, 2013. It turned out be a major boost in the corporate governance goal. There were many improvisations which led to an effective independence threshold. It contains a fair list of exclusions. Moreover, it also lays down the overarching subjective requirement of expertise and experience.

 The criteria discussed above basically amounts to the fulfillment of objective factors. What the definitional issue of independence lacks is the subjective element. The issue of the subjective element or the practical aspect to the independence of Independent Director has been discussed below.

 How much “Independent” are Independent Directors? The theoretical basis for the institution has already been discussed at length. Going through the above discussions it was clear that it is quite possible to come up with satisfactory objective criteria for the attribute or independence but it is also of utmost importance to understand the fact that the business is carried on at a real-time basis and fulfillment of the objective criteria would not serve the real purpose and pacify the ground realities. These subjective element lies in the nomination, removal and the remuneration process that hasn’t been dealt by the legislation so far. This element hits the very core of the independence criteria of independent director. 

Nomination & Election Process 

The law does not provide special provision for the nomination of independent director. However, Clause 49 of the Listing agreement lays down as to who would nominate the said independent directors. Above clause lays down that Nomination and Remuneration Committee of the board will do the needful. It specifically mentions that Nomination and Remuneration Committee of the board will formulate the criteria for determining qualifications, positive attributes and independence of a director and will identify and recommend to the board their appointment. This is certainly followed by board approving or disproving such recommendations and takes them to general meeting for final approval. Section 152(2) says that “every director shall be appointed by the company in a general meeting.” Now, it is of utmost relevance to mention here that the Nomination and Remuneration Committee only nominates candidate for the post of independent director and still the decision making power rests with the board. The fact that the committee only “nominates” and it is commonly seen that the committee nominates people acquainted with the promoters or the directors. This process leads to the independent director who is appointed is left out with a sense of indebtment to the promoters or directors. This is the triggering point where the independence of the director is hit brutally. The present law does not lay down specific procedure as to the appointment or the nomination of independent director. The appointment of independent director in India takes place through the usual process where each director is to be voted on individually at a shareholders’ meeting by way of a separate resolution. It is seen that the appointment of such independent directors are at the petty of the controlling shareholders. 

One of the main functions of independent director is protection of the interests of the minority shareholders but under the present matrix of appointment and removal leads to the fact that the sole purpose of independent director gets disbursed. Above fallacy can be remedied by the increasing the participation of minority shareholders. Effective independence of independent director could be achieved by two schemes namely by the case of cumulative voting by shareholders and secondly by election by a majority of minority. By the process of cumulative voting, minority shareholders could be given their chance to elect the independent director in proportionate to their shareholders. This would ultimately lead to reduction in dominance of controlling shareholders. In this scheme, individual shareholder is given the power to exercise to respective number of votes determined as the product of the number of shares held by the shareholder and the number of independent directors to be elected. This scheme for the nomination of independent director would ensure effective independence because it would involve participation of both the minority shareholders and controlling shareholders to elect independent directors depending on the proportion of their respective shareholding. Alternatively, the process of voting by majority of minority can also certainly boost the element of independence of independent director. This type of nomination will run on premise where only minority shareholders would be given a chance to appoint the independent director. Each independent director will remain elected as long as it enjoys the majority support of the minority shareholders. Non-participation of the controlling shareholders will certainly lead to boost in the independence of independent director. This scheme is useful because it will bring out the true representation of the minority shareholders and will instill accountability in the minds of independent director towards minority shareholders.


 We have already discussed as to the loophole in the appointment process which diminishes the independence threshold. Now, the question arises as to whether the same is similar with the removal process. The answer is affirmative. Section 115 of the Companies Act, 2013 says shareholders can give a special notice to move a resolution. Section 100 lays down that shareholders collectively owning 10 percent of paid-up equity can call for an EGM. Moreover, Section 169 lays down that any director can be removed by passing an ordinary resolution at a general meeting. Perusal of the above provisions quite clearly reveals that there is certainly no distinction between the removal of “independent” and “nonindependent” director. Thus, the process of removal of independent director is quite lucid i.e all directors need to do is aimed to provide a special notice to commence a resolution, followed by an EGM and finally passing that resolution. It is generally seen that majority Indian promoters have substantial amount of shareholdings in their company, so the removal of independent director on their whims and fancies is not mere a possibility but reality. This is another reason what affects the independence of independent director. 

Issue of Remuneration 

The Companies Act, 2013 specifically proscribes any kind of business or pecuniary relationship between the independent director and the company. However, Sec. 149(9), 197(5) and 197(9) of the Companies Act, 2013 talks on remuneration. Combined reading of the above provisions reveals that “independent directors can be paid a sitting fee and related reimbursements for attending the board/committee meetings and profit-related commissions as approved by the members.” This is where the problem lies and this problem jeopardizes the independence of independent director. The general practice prescribes that commissions which are related to some profit, the proposal is initiated in the board and followed by a general meeting for approval by shareholders. Since the process involves the participation of dominant shareholders, it very much strikes the core of the independence value of the independent directors. 

Concluding Remarks

 Above deliberations lead to the conclusion that there still persists some problems which strikes the very core of the independence of independent director. The issues of nomination, removal and remuneration needs to be addressed probably by an amendment because it erodes the very institution of the independent director. Independent director has been a tool for corporate governance and if these problems are remedied, it will emerge a very effective institution. The present institution of independent direct is in dire need of the overhaul change to make it a robust and an effective one.

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Legally Speaking

‘Honour killing’ offenders must be tried as violators of fundamental rights



“We don’t live in a world in which there exists a single definition of honour anymore, and it’s a fool that hangs on to the traditional standards and hopes that the world will come around him.” –  Joseph J. Ellis

To begin with, the fabric which binds and protects the integrity of this nation as a whole has been tested time and again and one being on the abrupt practice of ‘Honour Killings’. The terms «honour killings» and «honorable crimes» have been used interchangeably to describe the incidents involving the brutality and badgering caused primarily to young couples who intend to marry someone of their own choice[1]  including those who dare to ceasefire the boundaries of “whom to love” set by their family members. Murders like these which are the acts of retribution, usually death, performed generally by the patriarch›s mind as a response to protect and maintain the dignity and pride of the family.  The element which gives rise to such abrupt and feudal practices are the perception or apprehension of bringing dishonor to the society/family by one of their own family members. These barbaric practices have now taken a front pew in our society, resulting in the suppression of inalienable rights, enshrined under Article 21 of the Constitution of India. 

Democracy in Quarantine 

The COVID- 19 pandemic needs no introduction and description now. In India, amid lockdown, an unprecedented event of honour killing was reported from the southern part of India[2] where, M. Sudhakar, 24, was killed by his wife’s father for marrying outside of his caste. Cases surrounding feudal practices in the name of gender, caste, and religion; have demolished the hailed findings and verdicts of the Supreme Court on what we call as the basic feature of the Constitution of India ‘The Rule of Law’. Supreme Court recently delivered another notable judgment wherein the court said that the law will not come to guard any person who in the name ‘honour’ takes a life of another person[3].

 Another, odd practice which has locked the still has a pew especially in rural sectors of the country is the informal system of ‘Khap Panchayats’;  wherein the society and especially the men who consider themselves as the protectors of their culture and family issue severe orders or ‘dikats’ to restrict and remind the realm of love. In the case of Shakti Vahani[4] the apex court of the country categorically laid down stringent guidelines, thereby ensuring protection to young couples against the feudal orders of the Khap panchayats. It further ensured an immediate registration of FIR against such orders andx extended to provide safety, if needed. The ghost which has confined the system of democracy into the four walls is the hinge of traditions vs modernity.

 Pandemic of Caste

 The impact of the caste system has been wide and varied across the country. It has burnt a family of Dalits including kids alive. It has beheaded a person who had ‘dared to contest’ in local body elections. Dalit women continue to be sexually harassed across the country. The list is endless. Honour killings perhaps have the most dreadful impact upon the caste systems in the country today. The Supreme Court judgment of 2006[5] delivered a notable finding on ‘Honour Killing’ and it stated that «There is nothing honorable in such killings, and in fact, they are nothing but barbaric and shameful acts of murder committed by brutal, feudal minded persons who deserve harsh punishment», but, it failed to incentivize the government to bring a new code on ‘honour killing’ thereby criminalizing such barbaric, feudal practices at large. Murder in its very name is a heinous crime. Murder in name of caste inevitably murders the principles of Dr. B.R. Ambedkar, who once remarked that if the practice of building and taking shelters in the temples of caste would continue then it will only deteriorate the integrity of this country[6]. But in my notion, the Indian Laws have miserably failed to distinguish between a murder and a caste murder. Honour killings, thus, has proved to be at the top of the list of spate crimes across the country. 

 In the culture of patriarchal control and notions of feudal minds, where women are not free to fall in love with a man of their choice, particularly from different religion or caste, these egregious violations of inalienable rights need to be addressed with utmost caution which will not only provide rigorous punishment to those who consider ‘Honour’ in abysmal killings, but will also break the hornet’s- nest of queer notions.  In the year 2018, the Apex court of the country refused to take note of brutal murder[7]  of a 23-year-old Delhi based photographer by the family members of his girlfriend. Another incident which imbalanced the bedrock of the Rule of Law was the reported murder of Shankar[8], a Dalit man from Coimbatore who daringly fell in love with Kawsalya, an upper-caste Hindu which resulted in an escalation of caste-based violence where a group of men hacked Shankar to death for daring to marry an uppercaste woman without the permission of her family. In 2018, the data available with the National Crime Records Bureau (NCRB) reported that 10,773 people eloped due to the familial denial upon marrying someone of their own choice, suggesting only the number of people who are at risk over distinction in their caste, class, or religion. These distressing instances of killings and feudal practices are only a few out of plethora that has taken place across our country.

 In light of these blatant instances, one question that inevitably strikes down is, whether the government is shunning the desperate need of a stringent code on “honour killing” or is it the question of Who, as to who will take traditional values within the realm of judicial setup.

  A RoadMap for Curbing Menace

 Even if the local governments decide to step on the pedestal by introducing a separate regime on ‘Honour Killing’, it would require it to be enforced effectively. Police cooperation, in India, is yet another glaring issue, instances of outright refusal to register the complaint or perhaps officials harassing the complainant resulting in either withdrawing or not registering the complaint. 

The foremost facet of honour killing which needs utmost consideration is the tracking of honour killing cases across the country. The killings which take place in the name of ‘honour’ are frequently reported by the family members as suicide, the relatives and family members destroy every shred of evidence by immediate cremation of the victim. In 2019, a similar incident of murder of a minor girl by her family members was reported[9]. To control the exponential growth of such practices, one must start with the root cause. ‘Police’ and ‘Public Order’ being the subject matter of the State list, empowers them to make policies or laws on the same, as the case of the State of Rajasthan, in 2019 the Rajasthan Assembly introduced a bill mandating the death penalty for the crimes and practice of ‘Honour Killing’[10]. Such dedicated regimes if gets introduced at the centric level, would not only bolster up the safety of young couples who wish to marry the person of their own choice but would also let us all know the depth of the cavity caused by the distinction in religion and caste.   

The Tool of Amendments 

To construct robust and stringent law on the subject of honour killing, amendments majorly in the areas of Indian Penal Code, 1862, Hindu Marriage Act, 1955, and Evidence Act, 1872 can help in achieving the same. To mention a few, amendment in the definition of Murder under Section 300 of the IPC, must be done with an inclusion of the term ‘Honour Killing’; doing the same would generate more clarity on classification of honour killing cases thereby it would be easy for the justices to punish the victim pursuant to the succinct definition of honour killing. Apart from this, an amendment must also be made under Section 34 of the IPC to the extent of inclusion of the system of ‘Joint Liability’ in the cases of arising out of barbaric orders (dikats) of ‘Khap panchayat’ in order to accord stringent punishments to those to issue dikats along with those who are involved in the execution of such brutal orders.

 Along with these amendments, the offenders of ‘honour killing’ must also be tried as the violators of the fundamental rights facilitated by the Constitution of India to all its citizens. Therefore, the cases of honour killing must be put under constitutional scrutiny in order to ensure the facilitation of inalienable rights especially to every woman who suffers from the patriarch notions of living life and as aptly elucidated by an American poet “There are miles to go before we sleep, miles to go before we sleep”; and hence the only vaccine for this pandemic of caste would be a separate regime on honour killing.

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Legally Speaking

Shell companies: Illegality in functioning & regulatory framework

The Guwahati High Court in the case of Assam Company India Ltd and Ors v. Union of India explained the working of shell companies by stating that a ‘shell company is artificially identified
with suspicious activities which include serious offences like tax evasion’.

Raj Aryan & Dharna Rajpal



Punjab National Bank

Shell Companies and their features Shell Company has neither been defined under Companies Act 2013, Income Tax Act 1961 nor under any of the Indian Legislations. The Organization for Economic Cooperation and Development (OECD) defines shell companies as “A shell company is a company that is formally registered, incorporated, or otherwise legally organised in an economy but which does not conduct any operations in that economy other than in a pass-through capacity. Shells tend to be conduits or holding companies and are generally included in the description of Special Purpose Entities”. These companies are usually established with the motive to save the illegal money earned from the eyes of law. The money is transferred to the shell companies which have no physical existence, business transactions, etc. Through these companies, people try to commit offences like tax evasion, money laundering, use of money received from unknown sources. Recent cases and scams have helped the Indian judiciary to determine some basic features of Shell Company. The features identifying a company to be a shell company are – 

The product or services provided are totally different from the company’s main business. Companies having no physical existence at the mentioned address or several companies having the same address. Companies having very less or no assets. The company established for illegal cross-border transactions and transfer of a huge amount of money. Payments of the large amount made to shell companies without any reasonable and legal business. 

Through the above mentioned features of a shell company, it can be concluded that the simple motive behind the establishment of these companies is to commit economic offences through the laundering of illegal money earned by the large businessmen with the help of powerful people. These shell companies get registered by fulfilling all the legal formalities required for registration of a company. Due to the lack of check and balance system, and proper legislation on these companies, people go on committing such offences very easily. These offences lead to black marketing to a greater extent affecting the economic condition and trust of people over financial institutions very badly.

 The Legality of Shell Companies

 The Guwahati High Court in case of Assam Company India Ltd. and Ors v. Union of India explained the working of shell companies by stating that “A shell company is artificially identified with suspicious activities which include serious offences like tax evasion, Benami transactions, and conversion of black money to white, money laundering along with other associated offences”. A shell company is not always made for illegal purposes. Incorporating shell companies is completely legal while carrying out general business activities, such as a subsidiary to facilitate business takeovers along with estate acquisitions1, or to protect assets from lawsuits, to hide dealings with another company or to avoid target of criminals, or to gain access to foreign markets. 

Recent Scams based on Shell Companies 

Many wealthy individuals in India are using a large number of shell companies for illegal dealings and evasion of tax, etc. Some of the recent cases which had involvement of shell companies in India are: Yes Bank Scam: The founder of Yes Bank Mr. Rana Kapoor, along with his family floated more than 100 shell companies as per the information by Central Bureau of Investigation and Enforcement Directorate for misappropriation of funds and financial manoeuvres. These companies were used to cover the illegal money earned and were named after relatives of Mr. Rana. Due to lack of regulations over shell companies, Mr. Rana was able to set up more than 100 companies to commit an economic offence to a larger extent becoming a scam. 

In Punjab National Bank Scam (2018), the Enforcement Directorate found that Nirav Modi, with the help of 17 shell companies based out of India, laundered an amount of Rs. 5,921 Crores in the Year 2017. Nirav Modi’s uncle Mehul Choksi, who was a fellow fugitive billionaire diamond merchant, ran a larger number of shell companies. While ED shortlisted 140 shells companies, SFIO was probing at least 400 companies. Both of them turned fugitive after deceiving the PNB of Rs 14,000 crore by procuring Letters of Undertakings (LoUs) fraudulently.

 In the INX media Case, Former Minister P.Chidambaram was involved in granting Illegal foreign investment (FIPB) clearances to receive kickbacks. These kickbacks were paid through shell companies operated by his son Karti Chidambaram. The investigation department identified that there were several shell companies registered in India and abroad which had an investment of more than Rs. 300 Crore. His son also received payments of huge amount from a company located outside India which was figured in Panama Paper as well. 

Impact of Shell Companies on the Economy 

Shell companies help to launder money, illicit fund flows and tax evasions which harm the economy. 

The shell companies are assumed to have a serious risk to the investors. Due to the lack of proper definition of shell companies, it’s difficult for the investors to identify a legal and a shell company made for illegal purposes. The network of shell companies puts in jeopardy the interest of investors and shareholders. It also adds fuel to black money menace. 

Therefore, shell companies are hard to trace as they disguise their ownership to escape regulatory monitoring.

 Laws to prevent illegal activities of Shell Companies 

To tackle with the illegal activities of Shell Companies, there are few major statutes such as The Companies Act, 2013; Benami Transactions Prohibition (Amendment) Act, 2016; Prevention of Money Laundering Act 2002; Indian Penal Code, 1860; The Income Tax Act, 1961; Securities and Exchange Board of India Act, 1992; Black Money and Imposition of Tax Act, 2015.

 All these laws have helped to find out the culprits behind the big scams all over the country. A few of them have been discussed above. For example, Nirav Modi was charged with an offence under PMLA in PNB Bank Scam; Rana Kapoor in Yes Bank Scam was booked for misappropriation of funds and financial manoeuvres. 

In Satyam Scam, the country’s biggest accounting scandal, the company misrepresented its accounts to its investors, stakeholders, stock exchanges, regulators and its board members as well; and thus was booked under the aforesaid laws. P. Chidambaram was charged by CBI with offences of forgery, corruption and cheating under IPC in INX Media case, and moreover, the effectiveness of these laws can be seen from the fact that in Panama Papers leak case exposed 2,14,488 shell companies for numerous companies around the globe.

 Government Initiative

 In February 2017 a Task Force was set up by the Prime Minister’s Office under the chairmanship of Ministry of Corporate Affairs and Revenue Secretary to establish a systematic way to identify such companies indulging in illegal activities (here referred as shell companies). 

This Task Force had found more than 2 lakh such companies whose names it had struck off the Registrar of Companies (RoC) under Section 248 of Companies Act, 2013.


A proper definition of Shell Company is required to create a clean economy and to make such offenders come out of their shell before they start harming the economy to a greater extent. For example, we can look into the definition of shell companies as per The US Securities Act Rule 405 and Exchange Rule 12b2 which defines shell company as ‘A company with no or nominal operations; and either, no or nominal assets consisting of cash and cash equivalents, or, assets consisting of any amount of cash and cash equivalents and nominal other assets’.

 The Shell companies not only put investor’s interest in jeopardy but also give a boost to the business of black money. The government should plan at increasing vigilance over such companies with the help of data analytics. New rules and regulations should be made to protect the interest of investors. SEBI should keep an eye on wealthy organisations. The doubtful companies should be asked to submit a timely report of financial details mentioning about their subsidiaries and huge bank transactions compulsorily. The setting of a proper regulatory system, timely check, eye on corrupt practices will lead to a decrease in the amount of the frauds and use of shell companies for illegal purposes. The new regulations and enactments should be made in such a way that it doesn’t harm or affects the perfectly running legal business entities.

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Legally Speaking

How can India face AI consequentialism?

AI consequentialism is not a new phenomenon in the making. The concept is quite simple. In a research paper published in May this year, entitled ‘On Consequentialism and Fairness’, the notions of consequentialism with respect to AI ethics have been beautifully discussed.




Should a robot be an inventor?

Artificial Intelligence (AI) Consequentialism is not a new phenomenon in the making. The conception is quite simple. In a research paper published on May 8, 2020, entitled “On Consequentialism and Fairness” in Conceptual Analysis, the notions of consequentialism with respect to AI Ethics, have been beautifully discussed by the authors. The paper tries to show that consequentialism is a linear area of development, where its cones and sides can have blurs and sharpness. Nevertheless, consequentialism is an important doctrine in the philosophy of ethics in the West, which India with utmost humility, must never ignore. The author, therefore, intends to discuss what can be consequentialism, its problematic behaviour with regards to adopting a policy on AI Ethics, and how can India overcome it. The reasons behind the need of India’s potential to overcome consequentialism in AI is because of the political role of disruptive technology in our lives, and the lack of aesthetic understandings of the West of the East, especially India and China. The article therefore is a generic insight on the same development and its problems. 

How did Consequentialism Transform in the West and what did India learn from it? Consequentialism in general is about the politics, aesthetics and naturalization of consequences in any frame of reference. Whatever be the subject, it is the art and science of consequence which drives various considerations behind the subject. The theory of consequentialism has its basis in the theories of Jeremy Bentham, John Stuart Mill, Peter Singer & Derek Parfit. Theories of consequentialism can also be sought in Newtonian physics and Galilean relativity. In the coming centuries, amidst the First and Second World Wars, the political, scientific and social transformation of consequentialism has been lucrative & impressive. Considering the same development, what can be sought from Alan Turing’s ‘Polite Convention’ (also known as the Turing Test in his work “The Imitation Game”) to Nick Bostrom in the 21st Century, it is clear that the West has been proficient in adapting and practicing how consequentialism works. There can be many political references to the art of consequentialism, some of which can be American Exceptionalism, Israeli-Russian masochism, Chinese strategic secular realism. The cultural ethos of India also is based on these contours, and can be seen in the political and historical tenets of the phenomenon known as Indian Idealism. Vivekananda, Deen Dayal Upadhyaya, Gandhi, Ambedkar and even former PM Nehru have showered their own manifestations of ‘idealism’, which can be based on Indic, western or any credentials possible. It’s therefore not necessary to agree with every tenet and idea of the Indian schools of thought. However, one of the most emerging school of thought, which is looked upon by many people, is the Indic school of thought, comprising the Vedic-Historic approaches towards the conceptions of libertarianism, conservatism, secularism & capitalism – the four most important aspects of political contemporaries in the 21st century. The transformation of these 4 tenets of political and economic thought in India would shape how the Government of India would consider the role of AI in governance. The Responsible AI Draft proposed by NITI Aayog is a learned culmination of the values regarding AI Ethics with its own reservations kept in the Indian scenario. This draft, which was disclosed to the public in July 2020, is in lines with the AI Commitments rendered by the Pax Americana bloc, especially the US, the EU/ NATO/Council of Europe members, Singapore and the UK. Interestingly, even this draft espouses a reasonable coverage of consequentialism and constitutional morality with practical examples and models. This at least shows that India is committed to learn and adapt with the international standards over disruptive technologies. However, considering the Apps Ban procured by the Government as a significant example, it is not unreasonable to infer that actions like these also reflect a confusing image as to what can be the preventive measures that investors should adopt to affirm confidence for technology related investments in India in the coming years. 

The Aesthetic Transformation of AI Consequentialism and the Indic Way

 AI Consequentialism is a transformative phenomenon, and the Indic transcendence towards the same can be effective based on how India sees the constructive and substantive roles of the four tenets in politics, economics and society, which are – secularism, libertarianism, capitalism and conservatism. There are special reasons as to why only these 4 tenets are important in the road to the Indic way. First, all of the four tenets have international considerations, and can be utilized by a state by transforming it in clear coherence with the geographic, cultural and civilizational aspects of the state and its people. Israel for example is a Jewish state, but its proceduralism, like the UK (which is technically not a secular state due to the monarchy) – can be secular. Libertarianism and Conservatism are binary political ideas, undoubtedly. However, their role is significant because both of them have intersectional cohesion when it comes to the implementation of solutions. The problems of today, where global progressivism (Democratic Socialism and Cultural Marxism) and global conservatism (revisionism, civilizational intransigence & cultural relativism) are prevalent today also shows the need that the libertarian voice and considerations have either been ignored or have been marginalized into socialistic ideals, which is cancerous for any liberal democracy. Former US President Ronald Reagan & the former British Prime Ministers Thatcher, Cameroon and Blair believed in neoliberalism – which paved for a liberal, rules-based international order. The shortcomings of the order and technology politics which we see today, whether in the case of Brexit or the role of China in controlling the future of technology stems from the very issue that certain state actors, like China, Russia, DPRK and even the US until Donald Trump believed that they can control the future of technology. Israel, India, the EU, African Union member-states and even ASEAN countries were correct on their path that they cannot control how politically relevant technology can be. In fact, even if India’s policy considerations are thawing out from the Non-Aligned Movement faster than before, it is possible that most of the countries will now shape technology politics through protectionist, neoconservative and neorealist measures, and India will join them. Thus, we already have the background for the Indic way to come in and transform how can India seek AI Consequentialism.

 Let us begin with Secularism. Secularism itself is a fluid concept, and a better term that defines harmony and respect for religious freedoms stems from the idea of organic secularism. The Vedic methodology towards people who practice other faiths has never been antagonistic, considering Sanatana Dharma/Hinduism as a natural religion. Issues related to religion-centric violence do not hold water as they are social and individual problems, and not ideologically related. Therefore, India must learn from the thinkers and the schools of thought within the Indic literature to accommodate Organic Secularism as a replacement to civic nationalism, which was alleged by some jurists and scholars as the conception of the Constituent Assembly members. Organic Secularism can gain much higher validation that a model of secularism that is based on ethnocentric and Western-Mediterranean values because the role of technology would be assumed not through the lens of identity politics, which eventually ethnocentric models of secularism lead to in post-colonial states from Bangladesh to Nigeria. Even the neoconservative/classic liberal view towards the US Constitution must not be limited to the SCOTUS judgments on Secularism, because the comment on the separation of church from state by Thomas Jefferson is based on a premise that there was such an intermingled connection at the first place. The United States, unlike the Europeans, the Turks and the British, has been an open-ended state, which endorses religious freedoms at all levels. The Judeo-Christian view, which was biblical, has now transformed into American Exceptionalism. Despite anti-Semitism, Hinduphobia, Islamophobia, Jewish hatred and even White Supremacy, the US has retained its considerations as a stable and reasonable secular state, where the contours of exceptionalism do not sideline religious freedoms. Instead, the same is protected, whether of any identitarian origins. India can learn from American exceptionalism, and focus on the idealistic, all-comprehensive annals of Dharma and utilize the conceptions of Sanatana Dharma to transform the social aisles of morality, ethics, strategic parity and constitutionalism in matters related to technology politics, diplomacy and constitutionalism. Considering the beautiful resemblance of constitutionalism India can seek between the Constitution of India, 1950 and Shrimad Bhagavad Gita, it is possible that the Dharmic understandings of Organic Secularism in India can be utilized to cater, weaponize and stir the social, political and strategic causes of technology, and so, artificial intelligence. The second and third tenets, that is – Libertarianism and Conservatism – can be approached via the Indic way. It is true that the origins of classic liberalism and modern conservatism in Europe cannot be applied directly in the 21st Century due to obvious reasons. However, as Simon Anholt pointed out in his book “The Good Country Equation”, anything which nationalized, even propaganda, may or may not be internationalized that wide. This is the difference between global progressivism, an amalgamation of Cultural Marxism and Democratic Socialism & Libertarianism. Black Lives Matter, for example, as a cause, and not as an organization, is a reasonable cause. However, the involvement of the Chinese in the BLM rioting and the activities of revisionist vandalism in the US, the UK and EU states in the name of decoloniality shows that global progressivism, which actually misused the moderate behaviour of neoliberalism and global capitalism, is now being challenged in Europe and the US, in starters. There is no doubt that neoconservatism also needs to be transformed and limit itself from religious evangelism, whether of any kind, in the West, the Middle East and Asia. Thus, it is a global need that Libertarianism and Conservatism come up as a joint political phenomenon and school of thought, where dissent, support and considerations towards political actions are incrementally and reasonably assessed. India therefore can effectively transform libertarianism-conservatism since the Indic civilization, and the Indic school of thought actually focuses on some sort of idealistic virtues. The significant problems which can come in when it comes to adapting tech are related to (a) the kleptocratic and restrictive approaches towards rule of law and constitutional morality; (b) the philosophizing and selective application of comparative constitutional jurisprudence on civil liberties; and (c) the lack of harmony of ideological viewpoints when any judicial review, administrative reform or parliamentary action is put in course. India needs to overcome these issues through better background reforms. The Government of India at least has started the initiative via the works published by NITI Aayog on AI Ethics. 

The fourth tenet, Capitalism, does not require much justification, because the American view of capitalism has few shortcomings, such as corporatism and big government, which are a part of the ethnocentric oversight of MNCs, NGOs and governmental, multilateral and intergovernmental bodies affiliated or associated with the US and the Council of Europe member-states. Since, India focuses on reformed multilateralism, and can catalyse welfare policies in a reasonable way, it is strictly important that the Government ends all the archaic and restrictive means of economic marginalization, and repeat the 1991 moment. The moment of reforms in Labour Law and agricultural economics has already been achieved through the legislations passed in the past weeks, and this development is certainly reasonable. More or less, there are significant examples of the involvement of Indian diplomats, companies and start-ups, where in most cases, India has avoided corporatism, ethnocentrism and kleptocracy. Nevertheless, reforms and implementation can be cyclic, and the Indian state is therefore at least capable if not efficient right now, to bring effectiveness. In the information age, it is the state that takes a back seat and ensures more. 

An Indian Approach Towards AI Consequentialism 

AI Consequentialism is a transformative phenomenon, and the Indic transcendence towards the same is approachable. Let us understand what stems out of AI Consequentialism, and how those principles can be democratized in application. There are certain important conceptions in the field of AI Ethics and Social Sciences that have emerged in the coming times. Some of them, connected to the emerging nature of AI Consequentialism are:

 • Responsible AI 

• Algorithmic Accountability

 • Algorithmic Justice

 • Algorithmic Policing 

• Human-centered AI All these popularized conceptions have stemmed their origins from the US and Europe. Some of the common problems that these conceptions do have are – 

(a) they are too materialistic and lack practical application;

 (b) the conception of responsibility is too much marginalized to limited actors despite recognizing the fact that AI is influenced by omnipresence and the multiplicity of actors;

 (c) the conception that the multiplicity of actors in case of AI would be reasonable does not mean to marginalize the substantive thickness and structure of human rights or civil liberties enforcement because over clustering of human rights conceptions causes greater problems for law enforcement agencies and juries & the usage of old principles of civil and criminal liabilities is transformed into kleptocratic formulations; most of them are ideologically biased and untrue: their definitions are unsettling and they are central to political subversion and ethnocentrism; Now, considering India, it is important to gather incremental anthropological research to draw out solutions and contours to these common problems.

 Starting with the idea of Responsible AI, it is well-reasonable within the ambit of NITI Aayog to understand that there are no generalist solutions to recognize an autonomous ambit of AI. However, combating the ethnocentric approach of Responsible AI is impossible unless the Indic way of idealism and commitment does not fall into the trap of indoctrination. Instead, a better solution is to prevent any obscuration, focus on incremental and constructive inferential research, educate the cultural, aesthetic, identitarian, social and individual realities of AI and its influence, by balancing the perils of experience and developing superstitions and their normalization. The reason is that if any anthropological development is encultured as a tradition, which even AI can foster, in horizons like lifestyle, social media, economic cycles and global capitalism, then if on a chronological basis, the very aspect and reason behind the foresight and control of exercise of that custom/tradition is not acutely determined and self-regulatory for the individual, community or organization, then it is clear that the rupture and degeneracy of traditions and customs can easily lead to the development of superstition and judgementalism. Companies misuse AI Ethics and fund infotainment propaganda for the same purpose. India can learn from its civilizational maturity and articulation to prevent any radical enculturation of AI solutions in the social and economic forum of the sub-continent. Similar issues come up with algorithmic policing and algorithmic justice, because the difference between the two is that while the former is more related to the explanability and lack of fluidity cum coherence of algorithms to real scenario and their interventionism and aberrations made, the latter needs strong, and highly experienced definitive considerations, where non-elected representatives cannot participate at multilateral levels, and without a whole pack of consultations, education beyond basic standards of awareness, avoidance of fearmongering and judgementalism & pedagogy to enculture constructive enquiry – neither of the two conceptions can be appropriately retained. 

The concept of humancentric AI can be transformed and rejuvenated by the Indian philosophical take towards human anatomy, the cyclic connect between mind, body and soul & the constructively optimistic enculturation of AI into better, responsibly foreseen and stronger surroundings, at an aesthetic level. Similarly, algorithmic accountability can very well be established, but through avoiding the misuse of technocratic measures in a legal system. Considering the administrative conditions of the Indian state, it is highly recommended that no top-to-down absolutist approaches are established. Thus, deputizing and federalizing the implementation of the NITI Aayog’s proposals would certainly be of great help and use. Thus, in order to make that happen, trust as a credential and currency of purpose here – must be reflected through the intermingled network of feedback & experience backed by explanability & the resistant tolerance towards any sort of disruption that the collectivist and all-connective behaviour of AI infrastructures can cause in the near decades. Some of the recommendations made can be the initial ways to encourage ideas and solutions, but we must realize that the Indian state and its civilizational philosophy has not focuses on ends-centric, linear and mundane time frames of solutions, which means that the process of replenishment is more of a collective transformation & transition of the social order and civil society. It is important that Indian idealism should be not subject as a scapegoat towards any indoctrination of superstitious, ethnocentric or impractical diplomatic strategies. 

Abhivardhan, Chairperson & Managing Trustee, Indian Society of Artificial Intelligence and Law & Chief Executive Officer, Internationalism. 

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Legally Speaking

Farmers at the centre of political debate once again: Looking at farm bills from competition lens

Prof (Dr) Vijay Kumar Singh



It is surprising for many that ‘Kisan’ (the Farmer) is at the center of political debate and legislative action but for an election season. Generally, farmers in India are at the center of debate during Lok Sabha elections, as every political party has to make assurances in their manifestos for the farmers. Mostly these promises relate to ‘waiver of debt’ (karz mafi’), easy credit or some financial allowances. No one thinks to empower the farmer as a businessman himself to negotiate and be part of the competitive market regarding his produce. NITI Aayog in it policy paper in March 2017 proposed strategy and action plan for ‘doubling farmers’ income’. The present debate is going around the three legislations (Farm Bills) passed by the Parliament in a stormy monsoon session. While the proposal is awaiting final signatures of the Hon’ble President of India to become law with effect from 5th June 2020 (date on which the Ordinance was brought), let us have a look at the main features of the following legislation from competition perspective.

 • The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020 (Freedom of Choice to Sell Farmers’ Produce) 

• The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill 2020 (Framework for farming agreements) 

• Essential Commodities (Amendment) Act, 2020 (decontrolling supply of farm produce) An analysis of the aforesaid three Bills from the competition reforms perspective is a welcome step for the following reasons: 


 One of the greatest problems which have been highlighted across the governments in the past years was that of Agricultural Produce Market Committees (APMC) and its higher commission rates and exploitation of poor farmers. As the state APMC laws had restrictions, Competition Commission of India (CCI) had on several occasions said that “APMC laws and the pricing policy needs to be reviewed to remove competitive bottlenecks for the benefit of the farmers”. The new law takes away the exclusive rights of the APMC to trade in agricultural produce in an area. A farmer is free to choose competitive alternative trading channels for price discovery. While a trader would require mandatory PAN card, the farmer producer organizations or agricultural cooperative society are exempted. The freedom extends to the interstate as well as intra-state trade of farmer’s produce. No market fee by any name whatsoever can be charged under any state APMC Laws.

 Timely Payment to Farmer:

 Law requires the farmer to be given a receipt on the same day as an evidence of the trade and payment not later than 3 working days of the trade.

 Electronic Trading and Transaction Platform: Any person other than an individual may establish the ETTP for facilitating inter-State or intra-State trade and commerce of scheduled farmers’ produce in a trade area. This would be greatly helpful to the farmer to sell their produce online. This would be another open market, where competitors of ETTP would ensure advocacy, quality, and efficiency of their platforms. Though a government portal e-NAM exists, regulated privatization in this space would bring healthy competition. This is also forwardlooking keeping in view the focus on dynamically changing agri-economy, ecommerce and agri-exports.

 Price Information and Market Intelligence System (PIMIS): 

It is said that information and data is the ‘new oil’. Information is a double edged sword, while information asymmetry dissuades competition, information sharing sometimes may lead to anticompetitive practices like cartelization. Law enables the Central Government to develop a PIMIS for dissemination of information and would be a great tool at the hands of the farmers to know the demand and supply information for getting best for their farm produce. From competition perspective, the only challenge would be to monitor cartelisation in this space. 


 Fragmented small landholdings is one of the major challenges in India agricultural sector’s growth to which contract farming may be one solution. The second proposed legislation provides for empowerment and protection of farmers while entering into contract farming agreements if they wish to. The agreement would be in relation to the (a) the terms and conditions for supply of such produce, including the time of supply, quality, grade, standards, price and such other matters; and (b) the terms related to supply of farm services. Responsibility of the legal compliance part shall be on the sponsor. Rights of the sharecropper (bataidar) cannot be compromised through this agreement. Minimum period for this agreement would be one crop/livestock cycle and maximum 5 years, unless mutually decided more by the farmer and the sponsor wherein the production cycle of the crop is longer. 

Protection to Farmers: There shall be clarity on prices and would not depend on contingency. Farm produce under contract farming shall be exempted from the applicability of State Acts. Sponsor is prohibited from acquiring ownership rights or making permanent modifications on farmer’s land or premises. Farming agreement may also be linked to the insurance or credit instrument under any scheme of Central/State Government. A registration authority is contemplated to provide facilitative framework for registration of farming agreements. One of the provision clearly mentions that “no action for recovery of any amount due in pursuance of an order passed under this law, shall be initiated against the agricultural land of the farmer.” 

Minimum Support Price (MSP): This has been the most contentious issue in agriculture sector. While competition does not suggest prescribing any pricing, or MSP or subsidy, as this may be considered as market distorting. India being member of WTO has to also comply with the requirements on Agreement on Agriculture. A competitive market provides for price discovery based on demand and supply. Farm Bills does not provide any statutory backing to MSP. Otherwise, MSPs are announced by the government on the recommendations of the the Commission for Agricultural Costs and Prices (CACP) under the Ministry of Food and Agriculture for the enlisted crops (14 kharif, 6 rabi and 2 commercial crops). For sugarcane, Fair and Remunerable Prices (FRP) is declared. This topic requires a separate deliberation. 

Aggregators and Farm Service Providers: Small farmers may take services of “aggregator” who acts as an intermediary between a farmer or a group of farmers and a Sponsor and provides aggregation related services to both farmers and Sponsor as well as that of farm service providers like pesticide control, harvesting services, etc. 

Producer companies have now been proposed to be made part of the Companies Act 2013 under the 2020 Amendment (chapter XXIA-378A-ZU). ‘Producer companies include companies which are engaged in the production, marketing and sale of agricultural produce, and sale of produce from cottage industries.’


Regulation of the supply of such foodstuffs, including cereals, pulses, potato, onions, edible oilseeds and oils may now only be done under extraordinary circumstances which may include war, famine, extraordinary price rise and natural calamity of grave nature by notification of the Central Government. An order regulating stock limit (hoarding) of agricultural produce may be issued in the following circumstances: (i) hundred per cent increase in the retail price of horticultural produce; or (ii) fifty per cent increase in the retail price of non-perishable agricultural foodstuffs, over the price prevailing immediately preceding twelve months, or average retail price of last five years, whichever is lower. Public Distribution System (PDS) or the Targeted Public Distribution System orders are exempted from application of this deregulation, which means that procurement for PDS will not be hit by this order. Some concession is also available to a processor or ‘value chain participant’ of agricultural produce. VCP includes a set of participants, from production of any agricultural produce in the field to final consumption, involving processing, packaging, storage, transport and distribution, where at each stage value is added to the product. 

What would need serious attention by the Government? 

State Governments on Board: Agriculture is a State subject (Entry 14); however, the aforesaid legislation are likely framed under the concurrent powers vested with the Central Government (Entry 33) as opening up the whole agricultural produce market would require interstate facilitation, which in turn would need intervention of Central Government. Integrating the agricultural markets as one common market for the whole country offers several opportunities but also challenges which needs to be addressed.

 Advocacy: Prime Minister has said that people are spreading rumors about the farm Bill’s disutility for the farmers. Hence it is necessary to educate the poor and gullible farmers about the benefits of the legislation and how they can avail it.

 Dispute Resolution System: Conciliation Board has been provided as the mechanism of resolution and SDM is made the owner of this process. While this is a welcome step, if Mediation mechanism could have also been included it would have been better. Further the SDMs handling this profile would require special training and an orientation towards service (‘sevak’) and support to farmers. MS Swaminathan National Commission of Farmers in 2006 recommended that “the “net take home income” of farmers should be comparable to those of civil servants”. Farmers need to be treated as equal partners in economic development of this country. Let it not become another license raj bureaucratic system.

 Paralegal Volunteers: The modern day farmer cannot be at the mercy of the traders. Farmers have to take assistance from legal professionals when entering into the legal contract. There is a huge opportunity to create para-legal professionals in each village who can help the farmers with their legal issues of farming contract and other disputes with traders. While the government shall provide for facilitation in terms of guidelines, some support through the existing village community information and service centers.

 Competitiveness of Farmers: It is important to raise the agricultural competitiveness of farmers with small land holdings. However, at the same time, age old sensitivities to subsidies and MSP needs to be taken care of by the government, once the farmer gets hang of the new system, things would improve. Any change meets with some resistance, and this is a huge change rather a transformation of its kind. The visualization of farmers have mostly been dictated in movies and Indian literature as poor down-trodden person being exploited by traders (sahukars); however, the present requirement is that we look at the brighter side, that is ‘mere desh ki dharti sona ugle, ugle hire moti’ (my country’s land produces gold and pearls – lyrics from movie Upkar). If the farmer’s son looks at farming as an entrepreneurship opportunity, a lot can change the way we look at farming and its potential. This will cure several ills like migration, job scarcity and rapid urbanization. Need is to suggest positive changes in the laws and support implementation to the core. 

Dr. Vijay Kumar Singh is Dean, School of Law at UPES Dehradun. Views are personal

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